A lot of people feel embarrassed at the idea of going to a credit counselor. But think of it as a chance to get a mini college course about managing your money.
Making Your Family Finances a Priority
One famous money management advisor observed that most of us spend more time planning our family vacation than we do our family finances to try to come up with the money to pay for the vacation. The first step to success will be to pay more attention to money each day.
We brush our teeth and get washed and dressed as part of our daily routines, often without even thinking about it. However, we should take a few minutes to check the health of our finances each day too. This can include going through the mail and reading through credit card statements, sitting down to pay bills, and so on.
Any good credit counselor will tell you that being an ostrich and trying to stick your head in the sand to avoid money issues is just going to make things far worse.
Every counselor will help you try to get more organized. Not having a place to keep your mail and important paperwork means running the risk of missing a payment, or being overdrawn.
Have a Practical Budget
Similarly, not having a working budget is also a recipe for disaster. We all love the word budget about as much as the word diet. We think of them both as resulting in misery and deprivation.
In fact, the opposite is true. They are both a roadmap to freedom as you go on a journey to free yourself from the things that are really weighing you down.
A budget is really important if you only get paid every couple of weeks, and/or your wages are unpredictable rather than the same each paycheck (such as if you work for tips).
Each paycheck will have to be divided up to pay for essentials such as rent, utilities and gas for the car at the start of the month, and credit card payments in the middle of the month.
Make a List of Your Credit Cards and Due Dates
This will help you budget each month and never miss a payment. If you are mailing in a payment, allow at least a week for it to arrive. If you are paying online, allow at least three days for the payment to clear – longer if it is a weekend or a holiday weekend.
Think Honestly about Your Attitude to Money and Spending
A credit counselor will also help you reflect on your attitude to money, budgeting, spending, and using credit. This can be one of the easiest steps, or the hardest, when it comes to improving your finances. Your money mindset affects all aspects of your financial life, and could be holding you back from the kind of financial freedom you deserve.
Are you “easy come, easy go” or do you actively try to manage your money, learn more about investments, and save for your goals – like a down payment on a home, or a vacation? Do you think most people struggle financially, so that is your lot in life? Do you spend more time make shopping lists and spending than you do constructing a budget and saving?
Keeping up with the neighbors, living beyond one’s means and seeing desires as “needs” are very common issues that cause even smart people to overspend. You can turn things around by being honest about money, expectations and so on. It all starts with being honest with your credit counselor.